Custom Parts & Equipment Coverage and Agreed-Value Policies: Are You Sure You’re Fully Insured?

I run a personal injury law firm in Orange County, Florida. I’ve ridden motorcycles since 1984, so I’ve dedicated a large part of my practice to representing bikers. I was also a Progressive Insurance Special Lines adjuster and handled motorcycle claims for Progressive in Central Florida for several years before going to their Casualty Unit. Those experiences have been invaluable to me as a personal injury lawyer. That also means I get a lot of calls about insurance policies and coverage issues when things go south between bikers and their insurers.

I had a life-long friend contact me about his insurance company declaring his wife’s bike a total loss. She had a base model Harley FLSTC Heritage Softail® Classic, but he and his wife had extensively modified the bike and added several thousands of dollars of custom parts to it.

The problem he faced is that his wife had a crash that was her fault, so he had to go through their collision coverage for her bike’s total loss. When he purchased his policy, though, he didn’t buy additional Custom Parts & Equipment (“CPE”) coverage. He didn’t buy additional CPE coverage when they added even more CPE to the bike.

There was nothing I could do to help him because he was under-insured for his level of risk. His insurance company paid him for a base model Heritage Softtail plus $1K extra for his CPE. That’s it. He was what insurance companies call “self-insured” for the rest of his bike’s value. A lot of that CPE was damaged in the crash, too, so he couldn’t just add it to another Softail.

How much CPE does your bike have? An aftermarket exhaust? Custom wheels? An expensive paint job? Extensive amounts of chrome?

I’m willing to bet that most of you are “self-insured” for your extensive mods too.

One of those ways an insurance company determines your insurance premium is the value of your bike, and the insurance company does that by decoding your bike’s Vehicle Identification Number (“VIN”). It also relies upon you to tell them about your bike.

If your bike’s VIN decodes as a base model Harley, and you didn’t tell them about your additional CPE, then that’s what the insurance company will pay you for if it’s a total loss if you don’t have that additional CPE coverage. The insurance company will not pay you for more risk than it has underwritten.

If you put $20K of aftermarket parts on a $10K bike, then your insurance company will only pay you $10K for it. A standard motorcycle policy won’t pay you for your bike’s full value if you have lots of CPE or mods and no additional CPE coverage. Most insurance companies will allow you an additional thousand dollars or so in CPE—some do not—but that’s it.

Think about it: How much money would you lose if your bike were a total loss through being wrecked or stolen right now?

Read your insurance policy if you don’t believe me and look for the section that discusses “Actual Cash Value.” That will confirm what I said. The insurance company only owes you for what it agreed to insure when you bought your policy.

There are two ways to avoid this problem with your insurance company:

  1. Your first option is to buy additional coverage for the amount of CPE you’ve put on your bike. You’ll need receipts to prove the CPE’s value, and like almost anything else, CPE loses value over time, so you usually won’t get a dollar for dollar reimbursement. Additionally, CPE is usually worth less than factory equipment. That’s particularly true when it comes to wheels and custom paint. Insurance companies will almost always subtract the OEM value from any CPE equipment you put on your bike. Also, you need to be careful to buy additional CPE coverage whenever you buy more parts for your bike. It’s easy to buy parts and install them, and then not have enough CPE coverage in a total loss because you forgot to call your agent and increase your CPE coverage.
  1. Your second option is to buy an Agreed Value (or “Stated Value”) policy. This is a better option if you have a lot of CPE, if your bike is highly modified, or it’s an antique. Some insurance companies will not write these policies so you must shop around for an insurance company that will. Once you and your insurance company agree upon your bike’s value then that is what the insurance company will pay you if it’s a total loss one year or 10 years from now. That only changes if you and the insurance company agree upon a new value. It’s important to keep your policy current to reflect your bike’s market value. Agreed Value policies can be expensive, but if your bike has a lot of mods or is an antique, it may be worth it.

Unfortunately, if you don’t have additional CPE coverage or an Agreed Value policy, then no lawyer can help you get the value of your bike from your own insurance company. Your insurance policy probably has an arbitration clause in it that says if you and your insurance company can’t agree on your bike’s value then you must submit to binding arbitration. Arbitration is expensive, and I think it’s almost useless in such cases.

It’s not always possible to go through the other person’s property damage coverage. That person may not have any insurance coverage or have very little insurance coverage, so a lawsuit is probably throwing good money after bad. That’s because our courts award judgments, not money, and it’s up to you to collect on those judgments. Most people have nothing, so you can’t get anything from them. We lawyers call such people “judgment-proof” or “uncollectible.” That’s why we don’t handle cases in which there isn’t any coverage. You can’t get something from nothing, so you must protect yourself. No one else will.

Insurance is great if you buy what you need for your level of risk. Keep in mind that 25% of Florida drivers have absolutely no insurance coverage, and many only have $10K of property damage coverage, so you can lose a lot of money very quickly in a crash if you don’t protect yourself.

I hope you’ve found this article informative.

Consistent & Appropriate Treatment Are Key To A Successful Case

You must treat consistently and appropriately if you want full compensation in any personal injury case.
 
  1. Inconsistent treatment means big gaps in treatment and/or failing to follow your doctor’s recommendations.
  2. Inappropriate treatment means continuing to do something that obviously hasn’t resolved your pain and discomfort despite repeated attempts. When one type of treatment doesn’t work then you must try a different kind of medical provider or technique. You can’t do the same thing forever and expect a different result.
 
Inconsistent and inappropriate treatment can kill cases.
 
Let’s look at three cases that are typical of what I see as a personal injury lawyer:
 
Client A gets into a crash and doesn’t get treatment for two months. He then goes to his family doctor who recommends an MRI. Client A finally gets the MRI a year later. Client A then goes to an orthopedic doctor who recommends a three-level cervical fusion. A cervical fusion is a highly invasive surgical procedure that requires replacing a damaged cervical disc with a cadaver bone and metallic hardware. It will cost him about $300K and he will likely be paralyzed if he doesn’t get it. He doesn’t get the surgery because he’s too busy. His out-of-pocket expenses consist of $200 in co-pays.
 
Client B gets into a crash and goes to a chiropractor. She treats a few times a week off and on for three months, stops treatment, and then returns to treating off and on again with the chiropractor. She discovers after nine months of treatment that she has cervical herniations. She doesn’t treat anymore but complains of continuing pain over a year later. She then consults with an orthopedic doctor who recommends a two-level cervical fusion that will cost her about $200K. Client B has the cervical surgery and is out of work and in a neck brace for three months. She lost three months of pay because she didn’t have FMLA or disability insurance. Her total out-of-pocket expenses are $250,000.
 
Client C gets into a crash, treats about 24 times with a chiropractor, and when her symptoms don’t resolve, has an MRI, which reveals the same type of cervical herniation as Client A & B. Client C goes to see an orthopedic doctor. The orthopedic doctor recommends Client C try injections and refers her to a pain management doctor. Client C has a series of facet and epidural injections, and her symptoms decrease. A few months later, those symptoms return, so she schedules a follow-up visit with her orthopedic doctor. The orthopedic doctor recommends a single level micro-discectomy, which is a minimally invasive technique to remove the impinging disc material and release pressure on the nerve. It does not require a cadaver graft or hardware, and it is often done on an outpatient basis. Client C has the surgery and returns to work the next day. Client C returns to her orthopedic doctor once every few months due to her activities aggravating her injury, but her orthopedic doctor doesn’t believe she requires a cervical fusion, although he thinks physical therapy might help her, so she does that. She still has some pain on occasion, but overall, she feels much better. The surgery cost about $50K. She has no lost wages. Her out-of-pocket expenses are only $50K.
 
Pop quiz time:
 
  1. Which case is easier to sell to a jury?
  2. Which case is a lawyer more likely file a lawsuit on?
  3. Which client is a lawyer likely to drop?
Here is how I view these cases:
  • While Client C has the least invasive surgery and arguably the lesser injury, her case is probably the most valuable and the best litigation case.
  • Client A has a very low value case and most personal injury attorneys would drop it unless there are very low policy limits. An insurance adjuster would likely make a very low starting offer.
  • Client B is an okay case, but it will probably settle pre-suit, and Client B will not be pleased with the result.

Treat consistently and appropriately if you want the full value of your case.

Discovery’s Role in Litigation

People love to threatened to file lawsuits whenever they believe someone has wronged them. However, in my experience, people are not nearly as enthralled with lawsuits after they encounter what is called “discovery.”

What Is Discovery?

Discovery is the process of gathering evidence for trial. Each side gets to request evidence or information that might lead to evidence that would be admissible at trial. The  Florida Rules of Civil Procedure has very broad discovery rules, and almost any type of information is discoverable. The information that either side seeks does not even have to be admissible at trial so long as that information might lead to admissible evidence.

There are several discovery tools. I will give you an overview of each discovery tool and how it is used.

I. Requests for Admissions

Both sides usually send Requests for Admissions to each other. They are limited to 30 requests without the court’s permission to send more unless the court grants more.

Something that a defendant typically asks a plaintiff to admit or deny in an automobile negligence lawsuit is “Admit that your vehicle had a fully operational seat belt.” The next question might be. “Admit that you were not wearing your vehicles fully operational seat-belt.” You can probably see how Requests for Admission might be used later on at trial.

Request for Admission not only help each side develop their cases, but they can also be used to generate attorneys fees if a party does not answer truthfully. In other words, if you claim you were wearing a seat belt, but later on it turns out that you were not, then the other side can asked the judge for its fees and costs because you were not truthful. Fees and costs can get very expensive.

There are only allowable three answers to a Request for Admission:

  1. Admit,
  2. Deny, or
  3. Without sufficient information to admit or deny at this time.
II. Requests for Production

Requests for Production allow a party to request documents and other tangible items from the opposing party. These are typically tax returns, medical records, correspondence between a party and somebody else who might be involved in the case, diagrams, maps, photographs, video recordings, audio recordings, and anything else that might be used at trial.

The Florida Rules of Civil Procedure even has a mechanism that I have used in the past to request inspect of a vehicle long it had been involved in a crash. I have requested other things in the past  like vehicle repair estimates, cell phone records,  GPS records, black-box data, and driver logs in commercial vehicle crashes.

Requests for Production can lead to a gold mine of admissible evidence. For example, requesting a drunk driver’s credit card receipts can tell you how much he had to drink prior to getting into a crash and how many bars he visited  that night. GPS and black-box data can tell you how fast somebody was driving when the crash occurred. Requests for Production  are one of my favorite discovery tools.

III. Interrogatories

Interrogatories are nothing more than questions that a party answers under oath. Some of the most common questions are whether somebody wears glasses or hearing aid, the names of the doctors that they have treated with, the parties prior crash history, and if the party had been using alcohol or drugs when the crash occurred.

Many attorneys send out the same interrogatory requests each time they file a lawsuit. I do not. I tried to tailor my interrogatory requests to the case as closely as possible. I sometimes do not serve interrogatories on a party until I receive my Requests for Production and Requests for Admission responses. I also rarely  use all of my 30 interrogatory questions because I want to keep some in reserve  just in case something new pops up about which I want to inquire.

IV. Depositions

Depositions or when a party testifies under oath before a notary public. The other side’s attorney can hold one day of 7 hours of questions, and if need be, the other side’s attorney can asked the judge for more time. Depositions are by no means fun. It is a very structured form of speaking and you must be very careful about what you say under oath.

I spend at least a half hour telling my clients how depositions operate and how to answer questions during a deposition–short but full, truthful answers are the key to a successful deposition.

Testifying is a very different way of communicating. When you speak with your friends, you may go off on tangents, decide that certain information simply is important so you will not discuss it, and you even be careless about the way that you describe things.. But in litigation that simply will not work. In litigation, the other side tries to make you out to be a liar, and the easiest way to do that is to use your own words against you. That is because everything in discovery can be used against you. It is not that you are a liar or deliberately shading the truth, but that is exactly how opposing counsel  will try to use your discovery disclosures against you.

What I tell my clients to do is to be exceedingly careful about every word they utter under oath. I tell them to answer to the  best of their recollections and to state that their answer is to the best of their recollections, but to fully testify to everything they do remember.

V. Court-Ordered Medical Examinations

While court ordered medical examinations are usually performed on plaintiffs, the court can order defendants to undergo court-ordered medical examinations. That usually occurs when the plaintiff alleges that a defendant ignored a medical condition,  did not take his medications, or had some sort of physical infirmity or illness in which the driver and maybe even his employer knew was a dangerous condition. A court ordered medical examination serves many purposes, but usually, it is used against plaintiffs to attempt to show that the plaintiff does not have a permanent injury. It is a defense lawyer’s way of trying to show that the plaintiff is not entitled to pain and suffering damages because the plaintiff does not have a permanent injury. There are a lot of rules  that govern court ordered medical examinations, and it would take an entirely new post to discuss them.

VI. Discovery is Hard Work

Reading this post may make you believe that discovery  is not a big deal. I can tell you that it is always a big deal with clients. They think it is highly intrusive, they do not fully answer the questions that defendants ask them, they leave things out either accidentally or deliberately, and sometimes they simply do not remember things in their past that you would think anybody would remember.

Litigation is very  tough indeed, and really, discovery is the toughest portion of all. I can teach my clients how to testify at trial. I can tell each them to answer the question the attorneys or judge asked them, and not the questions they wanted the attorneys or judge to ask them, and I can teach them to answer the question and then stop talking. But getting clients to fully answer discovery can be extremely difficult because clients do not understand, no matter how many times I tell them, how important discovery really is until the other side tries to use their discovery disclosures against them.

So what is discovery? It is a means of find evidence that hurts the other side’s case. Trust me when I say that opposing counsel has absolutely no interest in discovering evidence that helps your case. The entire purpose of discovery is to somehow hurt your case or help theirs.

I have had clients who have dropped their cases rather than engage in discovery. It can be that brutal. But if you handle it correctly and with utter honesty, then it can make your case long before you step into the courtroom.

I like discovery. It is pure legal chess. It is often the most satisfying portion of the case second only to winning.

That saying a helluva lot for a trial lawyer like me.

The Cellular Culture

America is quickly becoming what I call a Cellular Culture.

 
Many people no longer own computers or printers. Scanners? Ha! No.
 
Instead, the Cellular Culture uses their cell phones for almost everything. That’s particularly the case with the sub-30 year old segment of our population. Some don’t even use email.
 
Their major means of communication is through . . . wait for it . . . social media.
 
If a Cellular Culture person wants to complain about a customer service issue, she uses Facebook, Twitter, and even Yelp. I’ve seen people pick up their phones in a restaurant to write a scathing review online rather than speak with a manager.
 
Less chance of having someone spit in their food, maybe?
 
Ringing doorbells is apparently now considered intrusive to some people. I have a neighbor whose friends don’t get out of their cars to announce their arrivals. They used to blow their horns, but now, I more often see them sitting quietly in their cars and texting until someone comes outside,
 
Yet even texting is considered old school by some younger people.
 
The Cellular Culture is different than any we’ve seen before, and it’s evolving far more rapidly than we know.
 
I practice personal injury law across Florida, and that means I will represent clients from from the Keys to the Panhandle. I do not meet in person with all my clients. There’s little need for it today because I use a Cloud-based software platform that allows my clients to see every document I send or receive in their cases, and my clients can use Face-time or Skype if they really want to see my smiling face.
 
Plus, I communicate with my clients every month or so via phone calls, texts, and email. I want to know what’s going on with them. I want them to know they can reach out to me through a variety of ways whenever they want. I respond whenever I can.
 
So far, so good, right?
 
The proverbial fly in the ointment, though, arises when my clients must send me legal documents. The Cellular Culture tends to send pictures of documents. Those pictures are often illegible and incomplete. I’ve received pictures of a contract’s signature block before.
 
That obviously won’t do.
 
Discovery in a lawsuit can be a nightmare. Think of someone sending you a picture of each Interrogatory answer. If you’re lucky enough to get PDFs, well, you’ll potentially receive a separate PDF for each page—that literally can mean dozens of PDF pages that could and should be sent as a single document.
 
I’ve spent many hours creating a single document from a jumbled mess of discordant PDFs. Such messes sometimes arrive a few hours before the discovery deadline.
 
It’s frustrating.
 
Yet I don’t blame my clients. It’s an educational process for them. I now discuss their legal needs—not mine, theirs—in the beginning stages of my representation of them.
 
No pictures. Opposing counsel and the E-Filing Portal won’t accept them.
 
If I send them a document to complete, then I need them to return a whole document. Not the signature page and certainly not just a picture of the client’s signature.
 
Don’t send legal materials and confidential through Facebook.
 
Don’t text discovery materials to me.
 
I also send SASEs to my clients now because I had one client who was unfamiliar with how to buy stamps. Some people do not use a service if it’s not online. Some seemingly have never mailed anything.
 
So how else do I handle this new communication challenge?
 
I now recommend my Cellular Culture clients download free PDF apps like Adobe Fill & Sign. I ask them to try a few until they find one they like. PDF technology has become increasingly more intuitive over the last few years.
 
I actually get the Cellular Culture despite some of the challenges it represents. I hate paper. I rarely print anything. Why should I? We lawyers rarely file paper motions anymore unless a judge requires it.
 
I use my iPad for referring to motions and pleadings when I’m in state court. My trial exhibits, unless I’m entering them into evidence, are encompassed in PowerPoint presentations.
 
I literally do not keep paper files or even CD-ROMs. I turn everything into a digital file and use a multiplicity of Cloud and backup hard drives in order to ensure nothing gets lost.
 
It’s a rare occasion when I can’t tell a client exactly what’s going on with her case. I’ve even done it from the Bahamas. Yes, I answer emails, texts, and phone calls while on vacation. I doubt you’re surprised. If you are, well, you’re probably new here.
 
Yet I wonder what the future holds for communication.
 
One day, and it’s coming very soon, we may be dealing with embedded communication technology that doesn’t require external devices. Indeed, that’s the premise of the Synchronicity. Google the term. You’ll probably be fascinated by the concept.
 
We will all be the Borg. Resistance is futile.
 
Until the Synchronicity arrives, though, we have the new Apple Watch. It no longer requires a cellular phone to be present to use it, and I suspect some of the Cellular Culture will no longer use their cell phones very often.
 
Eventually, we may have a strictly Watch Culture. I’ve no idea how I’m going to handle that technological evolution.
 
I’m sure there’s going to be an app for that.

Don’t Discuss Your Case On Social Media

Please do not post anything about your legal matters on social media. I guarantee you that opposing counsel will try to use it against you. That’s defense counsel’s job.
 
You can’t blame opposing counsel when you make her job easier.
 
I’ve had personal clients post pictures and videos of themselves climbing mountains, skydiving, running in marathons, lifting heavy weights at gyms, easily swinging children around like rag-dolls, clearing voluminous amounts of debris from their yards, and many other such things that defendants will use against them during litigation.
 
Can I explain away those things to a jury? Maybe. But why complicate your case? Why shoot yourself in your foot before you even step into the courtroom?
 
You might as well grab a big stack of cash and burn it.
I saw a video last night in which someone got rear-ended. The first words the driver spoke were less than kind and cultured. Okay, that stream of profanities is understandable, but a jury is not going to like it. But what’s worse is the fact that the driver and passenger then reassured each other that neither was injured.
 
Guess what opposing counsel will play to the jury? It will probably become her closing argument’s soundtrack. The jury will likely hear it several times.
 
You see, the fact is facts don’t always matter. The defendant gets to play defense, and if he can make you out to be a greedy liar, well, he’s probably within his rights to try it. Many jurors don’t like personal injury victims.
 
Don’t cripple your own case.
 
Here are a few things I’ve also seen hurt cases:
 
1. Posting “I had a great day!” Really? But you testified under oath in your deposition that you’re miserable every day . . .
 
2. Posting about your hobbies. You know, the hobbies you can no longer do? Those hobbies.
 
3. Posting derogatory comments about the person who hit you. Calling the woman who hurt you a “cunt” or a guy a “dickhead” is not going to play well with a jury. It’s a negligence lawsuit and not a deliberate act.
 
4. Bragging about what you you’re going to do with your lawsuit winnings. Well, they might not be as big as you think now, because opposing counsel will try to make your case into the next “hot coffee” example for tort reform.
 
5. Posting pictures of you hugging your car and weeping over its damage. “So, Mr. Plaintiff, you were more concerned with your car than with your alleged injuries at the scene, weren’t you?” Yeah. Seen that before too.
 
Here is my “free advice” on legal issues and social media: Nothing you post will help your case. Many jurors don’t get vacations, won’t appreciate your wedding pictures, will despise you for looking happy when you’re supposed to be miserable, and so on.
 
Don’t give the other side anything they can use against you. Claims adjusters and defense counsel can, do, and will comb through your posts to see what’s there.
 
Set your privacy settings as high as possible to minimize that possibility.
 
I’ve literally had to tell clients they’ve destroyed their cases through social media posts. No personal attorney wants to get a phone call from a claims adjuster or opposing counsel that says, “Tell your client we are reducing our settlement offer . . . Oh, and please tell her to save her social media post from XX-XX-XXXX. I’m sending you a spoliation letter/Request for Production today. Will you be dropping her?”
 
Social media bad.
Silence good.
Zip your lips and still your fingers!

How Lawyers Get Paid In Personal Injury Cases

Here is the difference between how plaintiff’s lawyers and defense lawyers get paid in personal injury cases:

Plaintiff lawyers represent the injured parties who have either filed a claim or lawsuit against the defendant who injured them.

I’m a plaintiff’s lawyer. I represent people whom others have hurt through negligent acts. I don’t do defense work even though I get asked to do so fairly frequently.

Plaintiff attorneys usually take personal injury cases on a contingency fee basis. That means we get a percentage of whatever you recover plus our costs for handling the case. Costs can be postage, ordering police reports and medical records, holding depositions, and paying expert witnesses, among other things.

Personal injury cases are calculated risks for plaintiff’s lawyers. We can invest hundreds of thousands of dollars of time and money in a contingency fee case, and there’s never any guarantee we will win. If we don’t get a settlement or win a case, then we don’t get paid.

It’s far different for defense lawyers.

Defense lawyers in personal injury cases represent people who have injured other people in negligence cases like car accidents, slip and falls, and other injury cases.

Defense lawyers—who are almost always paid by insurance companies—get paid by the hour. They often have a vested interests in maximizing their “billable hours.” The more time a defense lawyer can ethically bill, then the more money he and his law firm can charge.

What are billable hours?

Well, that’s how much time a defense lawyer puts into a case in six minute increments (unless the insurance company is paying the lawyer a flat fee to defend a case). There can be other formulas, but six minute increments is pretty standard.

If the defense attorney is what we call “house counsel,” then he gets paid whatever his insurance company employer pays him. Most house counsel are salaried employees. Most defense attorneys are not house counsel, though, and use billable hours in six minute increments to determine what they get paid.

That means if the typical defense attorney makes a one minute phone call that he bills his client for six minutes of time.

So if a defense attorney makes six one minute phone calls within six minutes then he can bill the insurance company for 36 minutes of his time (at several hundred dollars per hour). In other words, a defense lawyer can theoretically bill for more hours than there is in a day.

That’s perfectly ethical. It’s how they work. It might not seem logical, but it’s ethical.

Yet win, lose, or draw, a defense lawyer gets paid. The insurance company pays him no matter what happens in a case.

No matter what, a defense lawyer gets paid, unless he takes a case pro bono.

I have encountered only one case in which a defense lawyer had taken on a personal injury case pro bono (for free), and in that case, the defendant was uninsured.

That can happen. It just doesn’t usually happen. Everybody has bills to pay.

So how do I get paid as a plaintiff’s lawyer?

Well, let me tell you about a conversation I had with a Miami defense attorney after court (I handle cases throughout Florida) last week who tried to convince me to drop a negligence case:

Miami Defense Attorney: I don’t understand why you’re here. I get paid by the hour no matter what happens. I don’t think you can win [this case].

Me: I’m here because I get paid for results, and I make a damned good living doing it. I like this case. We’re going to trial.

Plaintiff attorneys in personal injury who work on a contingency basis get paid for . . . Wait for it . . . Results.

Not by the hour.

No results? Then we don’t get paid in contingency fee cases. That’s it. End of story.

I get paid for results in personal injury cases. Nothing else. That makes me highly motivated to get my clients the best possible results that I can.